Semiconductor stocks sat out the tech rally this week, and one strategist said a single chipmaker could point to their next move.
"Right now, I'm worried about Taiwan Semiconductor, because it's one of the most, maybe the most, important semiconductor in the world," Matt Maley, chief market strategist at Miller Tabak, told CNBC's "Trading Nation" on Thursday.
Taiwan Semi, which has a $565 billion market cap, is the largest name in the SMH semiconductor ETF. It generated nearly $48 billion in sales in fiscal 2020.
"Even though Nvidia and some of these other stocks have acted very well and have the ETFs in the semiconductor space within 2% or 3% of their all-time highs, one of the most important names [Taiwan Semi] is down 15% to 17% from those highs, so I'm concerned about it. Is it telling us something that we don't see yet?" said Maley.
Maley said the recent bounce in Taiwan Semi is a positive but he needs to see a move above its April high of $124 before he gets bullish. If it falls below its March low, beneath $109, that would be negative for the stock. It traded above $117 a share on Friday.
"When a big stock like that has some problems, you should definitely take notice," said Maley.
Quint Tatro, president of Joule Financial, is bullish on a different name in the chipmaker space: Intel.
"That continues to be our play, albeit boring and stodgy and so forth. But I think this is a name that's going to benefit from their movement back into manufacturing," Tatro said during the same segment. "Intel is a great play, it's a value play, nice dividend."
Intel trades at less than 13 times forward earnings, one of the cheaper semiconductor stocks. The SMH ETF, by comparison, trades with a 22 times forward multiple.
Disclosure: Joule Financial holds shares of Intel.